About 100,000 Bank of Ireland mortgage customers in Britain face a 50pc
increase in their interest rate, adding hundreds of pounds to the monthly
cost of many borrowers' home loans.

The bank is to increase its standard variable rate (SVR), which is charged after introductory offers expire, by one-and-a-half percentage points from its current level of just under 3pc.

The increase is much larger than recent rises in SVR announced by other lenders.

Borrowers with Bristol & West and Bank of Ireland-branded mortgages will pay the higher rate, although customers of the Post Office, whose home loans are also provided by Bank of Ireland, will not be affected.

The rise in interest rates is to be implemented in two stages. In June the bank's SVR will increase by one percentage point from 2.99pc to 3.99pc, then in September it will increase by a further half a percentage point to 4.49pc.

Several lenders have recently increased their SVR. Santander raised the rate for new borrowers on some of its loans over the weekend, while Halifax increased the SVR for some customers by almost half a percentage point. NatWest, part of Royal Bank of Scotland, is raising the rate on 200,000 mortgages by a quarter of a point to 4pc.

David Hollingworth of London & Country Mortgages said a borrower with a £250,000 repayment mortgage would pay £204 more a month once both stages of the rise had taken effect.

The rise had come about because a "cap" on Bank of Ireland's SVR of 2.5 points above Bank Rate was due to expire at the end of March, he said. Bank of Ireland blamed the increase on a rise in the cost of funding mortgages.